Forget the idea that renters choose apartments out of necessity. During the past decade, renters-by-choice has been one of the fastest-growing segments of the multifamily market, and multi-family developers have been lining up to serve them.
“[We] realized that there was a huge demographic out there that wasn't renting just because they couldn't afford to buy a home,” says Matt Perrin, principal of Trillium Residential, a Phoenix-based luxury apartment developer.
In California, luxury apartments are wooing potential homebuyers. Faced with skyrocketing house prices, many California families are choosing to rent rather than buy, at least for a while, says Randall Lewis, executive vice president of Lewis Apartment Communities. “They are saying, ‘My dream may be to buy a house, but I am willing to put that dream aside for one, two, three years if I can rent near the right schools districts, near the right parks, near the right shopping.'”
Developers expect this trend to remain strong well into the next decade. “I think it's going to grow with the next generation, who is even more active and wants more amenities,” says Perrin. “And I think it is easier for multifamily developers to offer those types of amenities than it is for single-family [developers]. We can create synergy with our density that you cannot create in a single-family [community].”
The biggest threat to the renter-by-choice market segment: condominiums. “In a condo, you can get the best of both worlds,” Perrin says. “You can get the lock-and-leave lifestyle, low maintenance, and you can also get whatever you perceive to be the benefit of owning.” But apartment owners and managers, take heart: Plenty of people still don't want the hassles of homeownership, he says.